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Findings No.2 COA Annual Audit Report 2004

July 26, 2008

2. Seventy eight percent (78%) of the total expenses in the Special Education Fund were disbursed as donations instead of the Province taking cha

The proceeds of the additional 1% Special Education Tax shall accrue to the Special Education Fund. Disbursements thereof shall be subject to the annual budgets approved by the provincial, city or municipal local school boards, as the case may be, whose disbursement shall be based upon the criteria set by the Department of Education. The concerned local school board shall authorize the provincial, city or municipal treasurer, as the case may be, to disburse funds from the Special Education Fund pursuant to the budget prepared and in accordance with existing rules and regulations. This does not mean, however, that disbursements thereof shall be in the form of donations and/or financial assistance to the Department of Education or any organizations, but shall be made as a direct disbursement from the books where the fund is held.

As of year-end, donation expenses in the Special Education Fund reached P1,334,273.00 or 78% of its total expenses. These were not disbursed as direct expenditures in the provincial books, rather, these were made in the form of donations and financial assistance to the Department of Education and other organizations (Annex 2).

Thus, determination of the legality, regularity and necessity thereof could not be made.

Management explained that the cited expenses were released directly to the Department of Education for reasons of practicality, expediency and exigency. They claimed that while it is true that the School Board budget is approved by their office, it is ultimately the Department of Education who executes and implements the programs and activities embodied therein. It often becomes unavoidable to release the financial allocation of certain programs directly to the department in the form of financial assistance. In so doing, the department is placed in a better position to carry its programs more efficiently and without delay.

Management however, took the audit observation with appreciation, such that they promised to endeavor to decide with prudence the manner by which releases from the Special Education Fund be made.

It may be worthwhile reminding management that where funds disbursed came from the coffers of the provincial government, it is just and rightful that disbursements thereof shall be made direct from the provincial accounts and not through donations and financial assistance because the Special Education Tax is entrusted and held in the Special Education Fund of the provincial government.

Recommendation:

Disburse the Special Education Fund expenditures directly from the provincial books pursuant to the criteria set by the Department of Education, as approved by the provincial local school board and not through donations and/or financial assistance.

Written by admin · Filed Under Commission on Audit, Misamis Occidental 

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